Bloomberg News

Shell Backs GlassPoint Solar Oil Recover Technology

By Wael Mahdi
December 12, 2012

(Corrects headline in story that first moved on Dec. 11.)

GlassPoint Solar Inc., which is
building the first plant in the Middle East that will tap heat
from the sun to coax heavy crude oil out of aging fields,
obtained funding from a group including Royal Dutch Shell Plc. (RDSA)

California-based GlassPoint said Shell and RockPort Capital
and others invested $26 million, allowing it to expand
operations in Kuwait, Bahrain, and Oman. The three countries
have sizable heavy crude deposits that require energy and
technology to lift from the ground, said GlassPoint’s Chief
Executive Officer Rod Macgregor.

The company plans to build local manufacturing plants for
its equipment in countries where it will get contracts to reduce
oil production costs.

“Shipping costs make a big part of our total costs and by
moving production to the Gulf area we will save more and support
local economies,” Macgregor said in an interview.

The company currently runs a 7-megawatt enhanced oil
recovery plant, or EOR, spread over 4 acres. It injects 50 tons
a day of steam into oilfields to loosen denser crude and allow
it to move more freely to the surface.

Natural gas is traditionally the fuel used to heat steam
for EOR projects. The scarcity of those deposits is making more
nations consider solar as an alternative, Macgregor said. Oman
uses 22 percent of its total natural gas output to generate
steam and pump more oil from the ground, he said.

“Instead of exporting their gas, Gulf countries are using
it produce more oil, and some countries are thinking about
importing gas to use it for enhanced oil recovery,” he said.

Heavy Oil

GlassPoint is seeking work in Kuwait, where deposits in the
northern fields and in the neutral zone shared with Saudi Arabia
require extra energy to lift oil to the surface, he said.

Kuwait intends to boost output capacity by about a third to
4 million barrels a day by 2020 and maintain that level for
about a decade by expanding its heavy crude deposits in northern
fields, Kuwait Oil Co. Chairman Sami al-Rushaid said a year ago.

Chevron Corp. (CVX:US) said last December it may invest $30 billion
to $40 billion in an effort to add at least 5 billion barrels of
crude reserves to an oil field shared by Saudi Arabia and
Kuwait. It would inject steam in the reservoir.

“Chevron will need at some points in the future to rely on
solar to generate enough steam for the project,” Macgregor
said.

Tatweer Petroleum Co., a venture between Occidental
Petroleum Corp. (OXY:US), Mubadala Development Co. and state-owned
National Oil & Gas Authority of Bahrain, plans to more than
double declining crude and gas production at the Awali field in
Bahrain at a cost of almost $1 billion a year through 2020.

“We are chasing contracts in Kuwait, Oman, and Bahrain,
and we are getting positive response from clients,” Macgregor
said. “Saudi Arabia and the United Arab Emirates are getting
there too so it’s becoming the mainstream in the future.”

To contact the reporter on this story:
Wael Mahdi in Manama at
wmahdi@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net